Marico Q1 FY27 earnings call

Marico started FY27 on a strong note, achieving a consolidated revenue growth of 23% and EBITDA and PAT growth of 25% year-on-year, marking its highest profit growth in the last 28 quarters. This performance builds on a high base from the previous year, with volume, revenue, and PAT compounding at 10%, 23%, and 17% respectively over a two-year period. The consolidated EBITDA margin improved by 40 basis points year-on-year to 20.7%, driven by softer copra prices and a favorable channel and portfolio mix.

The India business delivered one of its strongest quarters in recent years, with 11% volume growth and 21% revenue growth. This was led by robust momentum in core categories and continued scale-up of new growth engines. Parachute Rigids achieved 10% volume growth, its best in 20 quarters, and gained over 400 basis points in volume share. Value-added Hair Oils continued strong momentum with 22% value growth, driven by mid- and premium segments. The Foods portfolio grew 43% and reached an annualized revenue run rate of INR1,300 crores, while Premium Personal Care scaled to an annualized run rate of INR450 crores.

The international business reported a 15% constant currency growth during the quarter. Vietnam showed strong growth at 27% constant currency, driven by male and female personal care categories and successful go-to-market transformation. MENA grew 24%, with both Gulf and Egypt performing well despite inflationary pressures. Bangladesh, however, experienced a transient^📎 moderation in growth with 4% constant currency growth due to pricing anniversarization and demand softness from persistent high inflation and rising energy costs.

Marico's digital-first portfolio, including Beardo and Plix, delivered strong growth and improved profitability, reaching an annualized revenue run rate of over INR1,100 crores. Quick commerce accelerated its scale-up, reporting over 50% growth for core business and contributing about 5% to India business revenues (excluding digital brands). All digital channels combined now account for over 20% of India business revenues. Management emphasized an 'and' strategy for channels, leveraging digital for premiumization and innovation while maintaining strong general trade execution.

On the cost front, divergent trends were observed. Copra prices corrected meaningfully and are expected to remain range-bound at approximately 35% lower than last year's peak levels, despite a recent upward bias. However, crude and vegetable oils continue to show an upward bias, leading to expectations of relatively higher input costs in Q2. Advertising and sales promotion expenses grew substantially at 25% as the company continued to invest in brands, innovation, and consumer salience.

Marico aims for double-digit revenue growth to cross INR15,000 crores and high-teens EBITDA growth (aspiring for 20%) for FY27. The company's Vision 2030 targets INR20,000 crores in revenues with mid-teens EBITDA CAGR. Key strategic priorities include strengthening core franchises, expanding into adjacencies, scaling digital businesses profitably, and diversifying the international growth engine. The company is also focused on building a strong talent base and leveraging AI analytics for improved decision-making and execution.